New Florida Tax Amnesty Program  
A four-month tax amnesty program was enacted on May 27, 2003 during a special session of the Florida Legislature. CS SB 18A. The bill, projected to raise approximately $117 million during the period July 1, 2003 through October 31, 2003 (about $60 million from amnesty), was part of the budget compromise and was signed by the Governor on June 18, 2003. It is applicable to 19 taxes administered by the Florida Department of Revenue, including sales and use tax, corporate income tax, communications services tax, insurance premium tax, intangible tax, and others.

Participating taxpayers will be immune from criminal prosecution and will avoid all penalties and either 25% or 50% of the interest due, the latter if participation results from taxpayer-initiated contact with the Department. Following the conclusion of the amnesty, interest on delinquencies will be increased to 4% over prime, retroactive to January 1, 2000.

Eligibility. A taxpayer is NOT eligible for amnesty if it entered into a settlement before July 1, 2003, so any pending settlement discussions should be reconsidered in light of this amnesty legislation. The program applies only to taxes due prior to July 1, 2003. In order to participate, a taxpayer must file returns or amended returns, submit other required documentation, and make full payment of the taxes and compromised interest due before November 1, 2003. A taxpayer may participate though under audit, inquiry, examination or civil investigation, even if the amount in question is included in a proposed or final assessment, bill, notice or demand for payment, and even if the same is the subject of pending administrative or judicial proceedings. In such cases, taxpayers will be required to pay the taxes due and 75% of the interest. Taxpayers initiating contact with the Department will be required to pay the taxes due and 50% of the interest. Taxpayers currently engaged in a voluntary disclosure pursuant to F.S. s. 213.21, in which the payment of all interest is generally required, should request an interest waiver of 25% or 50% per the amnesty program and may need to delay making payment until July 1, 2003. If the interest waiver available under the certified audit program would be greater (abatement of first $25,000 and 25% of all interest due in excess of $25,000), a taxpayer under an audit notice but not yet being audited may ask approval for conversion to the certified audit program, but if approved must make payment prior to November 1, 2003. Taxpayers currently in a certified audit are eligible for the interest compromise under either the certified audit or amnesty program, whichever is better, but not both.

As a condition of participating, taxpayers are required to waive any right to contest or secure a refund of taxes paid under amnesty and to drop any pending protests, DOAH or judicial proceedings. No penalty or interest paid prior to July 1, 2003 will be refunded. Amnesty may be rescinded by the Department if the taxpayer was guilty of fraud or misrepresentation or there was a mutual mistake of fact. Taxpayers need to be aware that locally-administered local option taxes, such as the sales surtaxes, are not covered by amnesty unless the local government in question notifies the Department by June 1, 2003 that it is electing to participate in the State amnesty program. The Department is given emergency rulemaking authority.

As of November 1, 2003, the interest rate on deficiencies is increased to four percentage points over the adjusted prime rate charged by banks, rounded to the nearest full percent and adjusted by the Department every six months as under current law, but not exceeding 12%. The increased interest will apply not only to deficiencies arising on or after November 1, 2003, but to deficiencies that arose on or after January 1, 2000 and still unpaid as of November 1, 2003.

Posted: 2003-06-04 00:00:00.0

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